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Read the Monday Afternoon Wrap-Up for 8/6/2012 and the Tuesday Morning Commentary for 8/7/2012

With each passing day, faith in the GLOBAL monetary system is dying – at an alarmingly accelerating rate.  Whether it’s thieving brokerage firms…

PFGBest, Brokerage Firm, Missing Over $200 Million In Customer Funds As Founder Attempts Suicide

criminal banks…

Macquarie Sees $176 Billion In Lieborgate Losses, $88 Billion Hit To Libor Panel Banks

…or rogue algorithms, the overarching theme is that ANY capital within “the system” is at risk of being lost or stolen

How Does a Firm Go Bankrupt Overnight?

“Risk” is rising exponentially – and not just in financial matters.  There’s no need to expound on the myriad rights violations that have become ingrained in government policy; much less, its complete and utter disregard for the Constitution.  However, it’s safe to say “risk” is more pervasive than at any time in U.S. history – and in other, supposedly “first world” nations as well.

For Americans, Congress controls more aspects of your life than EVER before – not to mention, the Supreme Court itself…

S.C.O.T.U.S. turns the U.S.A. into R.U.S.S.I.A.”

…while its “agencies” manipulate stocks

President’s Working Group on Financial Markets


Federal Reserve – Quantitative Easing

currencies, and Precious Metals

Exchange Stabilization Fund

…as the cats guard the mice…

Libor May Be Manipulated, But Silver Is Not, CFTC To Conclude

…and the dogs the cats…

The Fed’s Gold Is Being Audited… By The US Treasury

I have vociferously espoused my view that such risks make it IMPOSSIBLE to trust “the system” with holding your assets.  On a personal basis, I spent the past two years liquidating ALL stocks and IRA accounts – converting ALL proceeds to PHYSICAL gold and silver.  I also took ALL my remaining “cash” out of the banks, aside from the tiny amount (less than 3% of my net worth) that my wife insists on holding there.  Even that sum is held not in a bank, but a “cash” (NOT MARGIN) brokerage account at Charles Schwab, to be withdrawn the second my wife gives me permission.

In other words, I trust NO ONE – and NO ENTITY – in the financial system, and likely NEVER will.  Heck, even your “safe deposit” box is at risk when you allow “the system” to monitor or guard your valuables – particularly when you entrust the most vile, criminal, racketeers…

BoA Drills Safe Deposit Box and removes heirlooms

Given the surging level of systemic risk, more and more people are withdrawing assets from traditional financial institutions, in lieu of holding them personally or sending them to third party facilities outside the system.  Better yet, many are converting their PAPER “assets” – such as stocks, bonds, and fiat currencies – into ITEMS OF REAL VALUE like PHYSICAL gold and silver, renouncing not only “the system,” but its supposed units of “wealth.”

However, such decisions can be very stressful, as few allies are made when breaking the “MAINSTREAM” mold.  Aside from endless PROPAGANDA fighting your every move, the government is constantly creating regulations to make it more difficult – such as FBAR and FATCA, the latter of which was addressed in my May 2nd RANT, “FATCA: ANOTHER REASON TO OWN REAL MONEY.”

“Simon Black” of Sovereign Man inspired that RANT, and followed up the topic with the following, excellent piece this weekend…

US citizens: Pay attention to this

…again, warning investors of how the time to PROTECT oneself is waning…

It’s a classic example of what happens when people wait too long.  Some folks took action early and are sleeping well.  Others saw the writing on the wall and did nothing.  They waited until the tax authorities were en route to even begin thinking about ways to protect their savings.  History shows that bankrupt governments routinely resort to plundering their citizens’ wealth to keep the party going. Bottom line, if your government is insolvent, your savings are at risk. And opening a foreign bank account is one of the most important things you can do for your savings.

Meanwhile, Jim Sinclair personally responded to Bill Holter’s article about Knight Capital’s COLLAPSE with the following, prescient comments…

I cannot understand why any reader is failing to take delivery of their certificates, metals, and monies, as getting anything back from a clearinghouse is a pure gamble on the unknown. The only reason I can see is dumbed downed laziness.  You are all involved in third parties holding your assets. This is madness and self destructive. 

Audits are no good. Insurance is not funded to cover all the risk out there.

Why do you hold securities with a clearing firm? Why do you own any public gold company that will not direct register or deliver certificates for you?  Why are you long paper gold and think you really own gold? How do you hold ETFs and really believe you own gold? You do not! How do you buy gold anywhere you never will see or touch.

It is raving madness that affects 9.9 out of 10 people reading this. The system is BROKEN and all the King’s men cannot put it back together again.

Your tax accounts are traps set for you. You are sitting targets that already know that your fiduciary, like all so called fiduciaries, is not worth a lead nickel because that is what your assets will be – worthless.

What can I do for you if the most simple act you need to do you continue to fail to do? Wake up, damn it!

Due to these issues, I have been asked more than EVER about systemic risk – and specifically, third party Precious Metals storage.  Regarding banks themselves, I am not a tax expert, so I cannot speak authoritatively of the pros and cons of moving capital from U.S. to foreign banks; particularly as U.S. government tax rules may or may not make such transfers feasible – while foreign banking rules may compound such risks.  Irrespective, it is the FINANCIAL SYSTEM in general that I fear – not just U.S. banks – which is why I so strongly advocate the trading of fiat currency (from zero-yielding bank accounts) for the security of REAL MONEY – i.e., PHYSICAL gold and silver – held outside the banking system.

Given that stance, I am often asked if offshore bullion storage makes sense.  There are several aspects to this question, but let me start by stating my belief that 95% of the world’s PM holders store their metal themselves.  Whether buried in the ground; hidden under a mattress; or locked in a safe, bolted to the ground in a secure hiding spot, guarded by guns, dogs, and alarms; your first consideration should be the feasibility of hiding wealth on your own property.

For most, such a strategy works well, particularly if you keep your mouth shut to family, friends, neighbors, and colleagues.  However, for others self-storage is not feasible – such as those that rent, have no permanent residence, are high profile persons, or own too much metal (by weight or value) to safely hold without professional safekeeping.  For those in the latter category – or exceedingly cautious people in the former – the question then remains as to the safety of various storage options.  All the topics above should be considered – and in some cases doubly so.  Remember, if currencies start crashing, governments will become more draconian than ever in their efforts to steal from the public.  Which leads me to my first, ironclad rule – DO NOT STORE PMs IN NATIONS WITH HIGH POLITICAL RISK.

Only a handful of nations actually offer bullion storage services worth considering, such as the U.S., Canada, England, Switzerland, Australia, Hong Kong, and Singapore.  There may be others – such as small programs offered only to residents – but to my knowledge, these are the only places international investors have access to.  Right off the bat, I would eliminate the U.S. and England, which I rate as having BY FAR the highest political risk of the seven.  Hong Kong and Singapore seem logical choices for some; although frankly, I don’t know much about the culture or customs of such far off lands.  It is hard to conceive such liberal, wealthy, capital-seeking governments taxing or confiscating stored Precious Metals, but I would do more due diligence on the Far East before making such a commitment – if for nothing else, because transportation costs and logistics issues are more onerous.  Miles Franklin is proud to offer bullion storage services in Hong Kong through Via Mat – one of the world’s largest logistics companies (NOT a financial institution) – and will shortly offer a Singapore option as well.

As for Switzerland – the last remaining “banking haven” on Earth, it is also difficult to conceive of the government EVER doing anything to endanger its “implicit bond” with international investors; although I must admit, I’m still a bit shaken by its decision to peg the Swiss Franc to the Euro.  That said, that decision had nothing to do with the security of hard assets held within the country, so I’d probably feel comfortable storing my metals there; especially given its integration into the highly evolved European logistics network.  Through Via Mat, Miles Franklin also offers Swiss storage services.

Which leaves us with Canada and Australia, two similar nations in terms of population sizes, resource-dependence, government policy, and “friendliness” towards Precious Metals.  Frankly, I know very little of Australian storage options – and again; the concept of holding assets so far away, and logistically inconvenient, would be a major negative in my analysis.  Which is why Canada – BY FAR – tops my list of storage options, particularly for Americans that might want to repossess their metal.

Within Canada, there are numerous storage options within BANKS, but as you know I wouldn’t recommend such a program to my worst enemy.  The whole point is getting OUT of the system, which is why Miles Franklin is so proud of its International Precious Metal Storage Program:


What makes this program stand out are four key advantages, NONE of which are available from most competitors:
1. Located in Montreal, Quebec, the facility’s proximity to the border makes it logistically viable to travel to Canada to take delivery
2. Our storage partner is a financially healthy armored  guard security company, of which bullion storage is a tiny percentage of their total business.
3. Miles Franklin officers personally audit client holdings each quarter, counting each ounce held in the vault.
4. Our price structure is unique, in that for both gold and silver, we offer fixed prices; that is, on a per ounce basis, NOT the ‘industry standard’ of variable rates that rise with bullion prices.
Obviously, the decision “TO STORE, OR NOT TO STORE” involves many facets – as well as the secondary consideration of where to store metal if not on your own person.  Much due diligence should be put into these decisions, and Miles Franklin is here to answer your questions.


Call Miles Franklin at 800-822-8080, and talk to one of our brokers.  Through industry-leading customer service and competitive pricing, we aim to EARN your business.